WALMART AND TARGET:
A COMMUNICATION COMPARISON
Prepared for
Professor Devon Bazata
Business and Professional Writing
Prepared by
Kathryn Haines
Fall 1, 2012
WALMART AND TARGET:
A COMMUNICATION COMPARISON
INTRODUCTION
Many discount retailers have come and gone over the years, but Wal-Mart and more recently Target, have employed business models that continually deliver profits, even in the struggling economy of the United states in recent years. Wal-Mart and Target both have expanded rapidly since their inception and while Wal-Mart has become an international retailer with stores in fifteen countries and all over the United States while Target has
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Because of the success of Target stores, the company was renamed Target Corporation in August 2000. Target Corporation has three main divisions: Target Stores, Mervyn's, and Marshall Field's. Target Stores, the second largest discount retailer, offers products geared to attract a more affluent discount shopper. The Target customer is much younger than other discount BIG BOX stores with an average age of just 40, mostly female, have children and are college graduates. The distinction in customer base is important due to the emphasis on quality at lower prices. Target separates itself from its competitors by offering more up-to-date and stylish products, better quality, while still keeping prices lower. The attractiveness of the store presentations and the employee attentiveness also gives Target an edge against other BIG BOX discount retailers.
Target's sales revenues have consistently grown since 2008, in spite of economical challenges. Ending sales for 2011 topped $69 million, a $2 million increase over the previous year. Sales increases show that their marketing, advertising and communication styles are working to bring in new customers and to retain the customers they have.
Summary
Wal-Mart and Target are both discount BIG BOX retailers which have made the most of their strengths and have drawn upon the differences in their customer bases, product mix and business strategy. Even though both
Target is one of the largest retailers in the United States. Target wants to be able to give guests better quality products for a cheaper price. They also want to be the one stop shop. Target relies on their team members to keep
Wal-Mart’s is one of Target’s biggest competitors, but other retailers are also trying to compete, such as Sears, Dollar General, and Amazon. Although Target caters more to a more upscale clientele, it still carriers many of the same items as Wal-Mart. Target is not able to compete internationally with Wal-Mart since all of stores are in the U.S. but by 2014, they will have about 150 stores
Target is one of the largest retailers in the United States. Target wants to be able to give guests better quality products for a cheaper price. They also want to be the one stop shop. Target relies on their team members to keep the guests happy so they always come back again and again. Target Corp. is the nation 's #2 discount chain (behindWal-Mart). The fashion-forward discounter operates about 1,765 Target and SuperTarget stores in 49 states, as well as an online business at Target.com. Target and its larger grocery-carrying incarnation, SuperTarget, have carved out a niche by
Headquartered in Minneapolis Minnesota, Target Corporation is one of the largest chains of retail stores in United States and Canada (Stone, 1995). Founded in 1902, the chain now has more than 360,000 employees worldwide. The company operates nearly 1925 stores out of which 1795 stores are in the US and 130 stores are in Canada (NASDAQ, 2014). The business prides itself in a diverse portfolio of merchandise that their outlets houses, ranging from dry groceries to electronics, furniture, apparel and much more. Its distribution networks make use of third party vendors, direct shipping as well as distribution centers. It also operates a successful e-store target.com which offers customers a virtual one-stop shop for their needs.
Wal-Mart and Target are both great retail stores to go and find a good bang for your buck shopping experience. After researching both companies, it appears they have the same ideas as a mission, saving the customer money. Wal-Mart Mission statement reads;
The Target Corporation is a general merchandise retailer that opened up in in 1962 under the parent company of Dayton Corporation. This parent company was renamed the Target Corporation in 2000 and are based out of Minneapolis. There are over 1,800 Target stores throughout the United States which includes Targets and Super Targets. In 2005 Target began expansion in India and in 2011 to Canada however this expansion into Canada did not fare well and all Target Canada stores were closed by 2015. According to Forbes in 2005 they we ranked amongst the highest cash-giving companies in America with 2.1% given and they donate about 5% of its pre-tax operating profit. In 2010 Target was ranked number 22 by Fortune magazine’s World's Most Admired Companies.
Maybe the biggest difference in the two Companies would be marketing campaigns. Wal-Mart markets towards the lowest income families. Wal-Mart markets by showing low prices, or how they are lowering prices. Target markets towards the middle class, and it shows that they have the goods that you want, instead of prices.
Target Corporation is a retail chain specializing in household goods, clothing, food, and accessories at discounted prices. The retail chain’s history started back in 1902 as Goodfellows and in 1910 as The Dayton Company. Initially, the chain specialized in “furnishings, fabrics and decorations for business and other public institutions” (“Target Corporation,” 2016, p. 5). Eventually, Target went public in 1967 and on to acquire Mervyn’s in the 1970s where they became the seventh largest retailer in the United States. Target operates in the United States, where it is headquartered in Minneapolis, Minnesota and as of January 31, 2015 Target employs over 300,000 people. “The company recorded revenues of $72,618 million in the financial year ended January 2015, the operating profit of the company was $4,535 million, [and] the net profit was $2,449 million” (“Target
I choose to talk about the Target Corporation, because it is a franchise where consumers constantly shop at for their grocery, home décor, and bathroom essentials. The Target brand is in the general merchandise retailing industry and was first established in 1962. Target’s mission statement states: “Our mission is to make Target your preferred shopping destination in all channels by delivering outstanding value, continuous innovation and exceptional guest experiences by consistently fulfilling our Expect More. Pay Less. ® brand promise” (Target Corp., n.d.). The company’s mission statement implies that Target is a store where consumers can get products for a reasonable price. Target is performing well despite of their security breach problem a couple of years ago. It does not follow Pfeffer’s principles to the key, but it is a high performing organization. Their goal is to provide affordable prices at their different full-service department stores. Target has 1,556 stores and is the fourth largest retailer in America. It ranks as the second discount retailer in America only Wal-Mart Stores, Inc. stands in their way (Target Corp., n.d.). In 2011 Target acquired the Zellers retail chain, at a cost of $1.8 billion dollars to its international expansion (Target Corp., n.d.).
Retail industry has gradually become the second largest industry, in terms of employment rates and establishments in the united states, it is the leading industry.it is estimated to be generating approximate of $5 billion annually in retail sales. For example, Wal-Mart is the leading retail shop in the world. It has an annual income of $312 billion and has a workforce of around 1.3 million in the united states and internationally it has more than 400,000 associates. It is an international corporation that was established in 1962. It controls a larger market of the retail industry, this is by their widespread chain of grocery stores, supermarkets and department stores.
Looking at Targets Porter Analysis, internal rivalry is one of the major and significant threat to their profitability and the future development of their industry. Competing in the market with big competitor like Walmart with a superior means to gain large market shares, Target is finding it very difficult to bring their prices down to keep up with Wal-Mart’s ability to cut input and supply chain costs. Looking at Target contribution into this retail industry, they had succeeded in surviving in the discount retailing sector compared to K-mart among other competitors. Target had been so impressive in their market profit margin because they have been growing extensively and maintaining relatively high profit margins within the industry.
Interestingly, Target, as well as its major competitors like Walmart, Kmart, and Kohl’s operating using a very similar, if not identical, business model. Most of the big-box retail discount stores offered not only low prices, but offered similar types of services including pharmacies, groceries/deli, photo processing, third-part food vendors located within the store, among others.
They use multiple avenues to inform their consumers predominantly T.V. commercials, which is the responsible for the majority of the advertising cost. However, they also use Internet ads, and newspaper circulars to draw attention and attract customers to their stores. Target spent 1.6 billion in 2015, which has reduced from 1.7 billion
In the lasting war among discount superstores, thrifty customers can follow a few of their go-to stores for deals back to that year: 1962, when Walmart, Target, and Kmart all opened their entryways. Following 50 years of moved back costs, bull 's-eyes, and Blue Light Specials, Cheapism set out to figure out which discount retailer has transcended the others as far as value, quality, and administration. As anyone might expect, Walmart posted the least costs on a shopping basket of 30 indistinguishable and like things - almost 5 percent less expensive than Target by and large and around 15 percent less expensive than Kmart. Then again, numerous clients attest that Target displays more appealing stock and a more pleasing shopping background. In their examination of Walmart, Target, and Kmart, they found that Walmart stands its ground on those fronts furthermore offers the amplest cluster of items and administrations both on the web and off, conveying real one-stop shopping. In light of current circumstances, Walmart gains their rebate crown. Target is next in line and Kmart disillusions all in all.
Currently, Walmart is Target’s strongest competitor and has a high level of market commonality with Target. Walmart and Target both offer the same product categories such as clothing, beauty & cosmetics, gardening & outdoors, food & grocery, etc. and this makes the threat of Walmart’s business towards Target especially significant. However, when it comes to customers of the two businesses, there is a difference with respect to age group. Walmart’s target customer ranges from age 45 to 54, while Target’s target customer ranges from 25 to 34. Because of the age disparity, the two companies are able to compete within the same market. It can be argued that Target markets towards more affluent customers when compared to Walmart, though pricing can